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>> Germany is inching closer to solving its current political crisis. President Frank-Walter Steinmeier announced Friday that he will host talks between Chancellor Angela Merkel, and her main rival, Martin Schultz. Next week's talks aimed at renewing a grand coalition between Merkel's Christian Democrats and Schultz's Social Democrats, and ending the deadlock that threatens to paralyze Europe's economic and political powerhouse.

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The SPD has been under pressure to drop its opposition to a new deal with Merkel's party after her talks to form a government with the Free Democrats and Greens collapsed. The grand coalition has governed Germany since 2013, but in September, the SPD suffered its worst election result in 70 years, prompting Schulz's decision to take his party into opposition.

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But that could be about to end, and as Reuters Paul in Berlin explains, that puts Schulz in an awkward position.>> Martin Schultz, the SPD leader, the Social Democrats Leader, has however, opposed teaming up with Merkel again. So it's hard to see how he would stay as Social Democrats leader, if his party does either directly go into government with Merkel, or support her.

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>> Schultz met with Steinmeier on Thursday afternoon, and after that held talks with senior SPD members. It appears they had a lot to talk about, that meeting going on into the early hours of Friday morning. Thirty of his lawmakers pressing Schultz for an about turn, according to German media.

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On Friday, Schultz said that nothing was set in stone.>> There's nothing automatic about what we're going to do. If discussions result in our deciding in some way to take part in forming a government, we'll put that to a vote of party members.>> If these talks fail, then Germany could be set for new elections, potentially leaving Europe's usual bastion of stability stuck in limbo for months to come.